haha
Generating normal maps and specular maps is another challenge completely but would be a great addition to skyline.
All we can do at the moment is to convert 1 image format to another. I think it may be some time before we are creating the other textures based on a diffuse map
The normal map conversion is for the _BC5 format which is a specific .dds format that is almost impossible to generate without some special tools. This format is needed otherwise skyline will crash with all the different normal map formats lol
This is a stability/performance improvement that does not necessarily benefit the user in a workflow, so we auto convert for you
Check PDF section on BC5 format.
However, changing .jpg to .dds is no problem at all. If you had a .png or .tga still in the folder after converting to dds and losing the alpha channel, you would then be able to reconvert to get the alpha problem. I thought skyline loaded a file of the same texture name if the orig texture didnt exist anymore. This must be what feels broken.